Micron, Qualcomm Show Strong AI Demand

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up, Micron soars after its AI-fueled forecast shatters Wall Street projections. Plus, Qualcomm jumps after posting a strong annual sales forecast. We're joined by Qualcomm CEO, Cristiano Amon, live. And Apple raises prices on some hardware, an extreme measure in direct response to the memory and storage crunch. And it is memory that is still at the heart of what's happening on Bloomberg Tech. A super bullish sales outlook from Micron, which is currently on track for its biggest jump in a month, but at the open, on track for its biggest jump since 2011 We will get to the details. There are two other big stories. One, directly linked. Apple is raising prices on some hardware, citing the memory and storage crunch and storage prices. Qualcomm, fresh off its investor day, has a lot of news and extended conversation with the CEO. It is still memory and it is Micron, and here's what you need to know. Micron didn't just beat expectations, it reset them higher, forecasting as much as $51 billion in fourth quarter revenue, well above Wall Street estimates. More importantly, management says AI-driven memory shortages could last beyond 2027, keeping memory prices higher for the foreseeable future. Even as Micron boosts its manufacturing capacity, and that helps explain our other top story. Apple raising prices on some of their hardware offerings, as the cost of key components, memory, stays high. Bloomberg's Mark Gurman has the story, and you write that this is an extreme set of measures that Apple is taking. Where are the price hikes? What is Apple saying about the reasons why?
And this is all about memory at the end of the day.

**Mark Gurman** (2:03)
Yeah, these price hikes are largely unprecedented in Apple's modern history. There hasn't been a time where they've hiked the prices across several different products across much of its product lineup. This is the iPad, this is the Mac, this is the HomePod, this is the Apple TV, this is the Vision Pro. It's essentially everything outside of some accessories, and of course, the iPhone, the most important product, the AirPods, and the Apple Watch. So this is a very big deal. I think that the price increases are pretty significant, but they're not necessarily going to be a big deterrent to customers, particularly on the Mac side. The iPad makes me a little uneasy, given all the competition in the tablet market and upgrade cycles. And then the Apple TV and HomePod prices are pretty significant, and given that there's so many cheaper alternatives from Amazon, Google and elsewhere, that could be a little dangerous for Apple in that market.

**Ed Ludlow** (2:55)
Mark, what struck me reading your report is how detailed Apple was in its explanation. Maybe you think that they weren't as detailed as perhaps they often are, but they're trying to tie this to what's happening in AI data centers, and they're trying to explain that for the longest time possible, they held off on doing this. They have no choice now.

**Mark Gurman** (3:17)
Yeah, let's remember other companies in the consumer electronics space, Apple competitors, hiked prices significantly in the prior months. Apple, you know, it's a good thing this time, is fairly late to these price increases, but Apple's Apple, they're the most popular consumer electronics company. Everyone's buying these products. And so this is the biggest of all big deals when it comes to price increases, that being Apple. The most interesting thing to me in Apple's statement wasn't that they're blaming AI data centers and memory. We know that. It's that they seriously hinted that there will be more price increases to other products. They said that these are the price increases that are happening today, leaving the door open, I would say, to iPhone and Apple Watch price increases in September when they announced the new models.

**Ed Ludlow** (4:02)
Bumbo's Mark Gurman, who leads our coverage of consumer technology. Thank you very much. Now yesterday Micron stunned with quarterly estimates that absolutely shattered Wall Street's expectations, signaling that the AI infrastructure boom remains strong. Again, Micron shares are on track for their best day in one month, but at the open, on track for their best day since 2011 Supply is tight. It is going to stay tight. There is no line of sight to supply improving and memory prices will remain high. That's the story. Chief Market Strategist Carol Schleif of BMO Wealth Management is with us for more. You have a very interesting, almost historical look at what will happen next. And that is that historically, for decades, tech had been a pretty reliable deflationary force. Mark just outlined actually more price hikes could come on that higher end Apple hardware. What happens as a result?